ORTADOWN, Northern Ireland - Even in the sunshine, this is a depressing place. The bitterness that seemed to be swept away by Friday's historic referendums is in full blossom here.

While the political settlement approved overwhelmingly by voters north and south suggested the vast majority of people on the island of Ireland want to accommodate each other, a walk around this town 35 miles southwest of Belfast is a somber reminder of how much more has to be done before the settlement produces peace.

Portadown is a microcosm of Northern Ireland and its problems. It is a starkly segregated town, a magnet for extremists on both sides. All of the issues that divide the two communities are in evidence here: parades and policing, irredentist paramilitaries and politicians.

For the last few years, Northern Ireland has come to a virtual standstill because of a disputed parade that is held here every July. Two weeks after the June 25 elections to a local assembly that will be created by the settlement, the Orange Order, a Protestant fraternal organization, will again try to march from a Protestant church at Drumcree down the Catholic Garvaghy Road.

Again, Catholic nationalists will put themselves on the road. Again, they will be clubbed off the road by the police, or police will try to keep the Orangemen from marching, triggering a standoff like the one in 1996 that produced the worst rioting here in a generation. A squabble that represents the old Northern Ireland, the march from Drumcree will be the first major test of the new Northern Ireland.

The ghost of Billy Wright haunts this town. Wright, who murdered Catholics, was murdered himself in prison last December. By killing him, the republican extremists who refuse to match the IRA's cease-fire ensured that Wright would inspire a new generation to use violence as a means of holding their dwindling patch.

Wright's image adorns murals in the Edgarstown section of town, where the remnants of Wright's Loyalist Volunteer Force are firmly entrenched. A cadre of young men with hard eyes and tattooed forearms skulk around Edgarstown, talking murder by day, looking for someone to snatch off the street by night.

Up on the Garvaghy Road, Catholics say they won't even give them the chance.

''We don't go into the town,'' a woman explained, terrified at the thought of having her name in a newspaper, even one that's printed 3,000 miles away. ''The Hamill boy lived next door to us. He was a lovely boy.''

Robert Hamill, 25, was stomped to death by a loyalist mob in the town center last year. The attack took place a short distance from a parked police Land Rover. Hamill's friends, who escaped the mob, say the police did nothing to intervene. The controversy over his death epitomizes the lack of confidence many nationalists have in the police.

People on the Garvaghy Road are in no mood to contemplate acquiescing to the Orangemen's demand to march through their neighborhood. They see the parade as a provocative display of triumphalism, a way in which unionists can put them in their place. They are not in a generous mood, feeling under constant threat by the loyalists who back the Orange march.

The loyalist tattoos on Ivor Young's forearms are fading, but his opposition to any form of accommodation with Irish nationalists is not. Young does not see peace breaking out. He sees just the opposite, saying Protestants are being marginalized, their traditions repressed, their Britishness sold out by the very government to which they profess loyalty.

''There'll be a war,'' he said. ''The young people of mid-Ulster will not let their country be sold out. Those boys in Belfast won't fight for the people of Ulster, but our boys will.''

Tom Gilroy, an optometrist, has seen his shop here destroyed twice by republican bombs, most recently a few months ago, when an IRA splinter group devastated the commercial center of Portadown with a bomb meant to derail the peace process. Gilroy has no time for paramilitaries from either side, and he despairs for the future.

''You see such hatred in the working classes. They'd have to die off for there to be any change,'' he said. ''But even the children, it's passed on to them. So how do you stop the cycle?''

Because this is a hotbed of loyalists who refuse to call a cease-fire, dissident republicans who are equally opposed to the settlement will continue to target it, to provoke the loyalists. Police believe a bomb they intercepted near the Irish border Saturday was on its way here.

There are some who take comfort from the settlement, thinking it offers an alternative to the absolutes put forward by extremists from both sides. Seamus O'Neill, headmaster at Portadown College, where Catholic students sing in a cross-community choir with Protestants, said the political settlement has given people the room to redefine their relationships with one another.

''We have to build peace at the local level,'' O'Neill said. ''Talking to each other, in the pubs, on the street.''

But O'Neill's students tell harrowing tales of attempted abductions, of being beaten up in the center of town for the alleged offense of straying off their plantation.

The overwhelming endorsement of the political settlement will go down in history as one of the significant acts of a divided people. Garret FitzGerald, the former Irish prime minister, said he believes it is one of the top three events in Irish history this century, the other two being the 1916 Easter Rising, which ignited the Irish war of independence, and the Anglo-Irish Treaty of 1921, which ended that war.

But people here can be forgiven if they don't exactly jump up and down as some political activists did in the King's Hall in Belfast, where the referendum results were announced.

There is fear and loathing on the streets of Portadown, not euphoria. In fact, there was no euphoria on the streets of Belfast or anywhere else in Northern Ireland after the election results were announced.

The reserve shown by many people across Northern Ireland was because they know there are towns like Portadown, where the future is a place where you know your space and hold it.